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Corn Refiners Allege Mexico Restrains High Fructose Corn Syrup Trad

Date Posted: April 6, 1998

The Corn Refiners Association (CRA) has filed with the Office of the
United States Trade Representative a petition complaining of policies
and practices of the Government of Mexico that it says denies fair and
equitable market opportunities for U.S. exporters of high fructose corn
syrup (HFCS).

Within 45 days of the April 2 filing, the U.S. Trade Representative must
decide whether to initiate an investigation under Section 301 of the 1974
U.S. Trade Act. That section allows the United States to act directly
against other countries if it determines after investigation that those
countries have restrained trade.

Since the latter part of 1996, the government of Mexico has been
involved in a multi-front effort to restrict market access for HFCS, the
corn refiners said. In September of 1997, representatives of the
Mexican sugar industry and the Mexican soft drink bottling industry,
with the support and encouragement of the government of Mexico,
entered into an agreement that restricts the soft drink industry's
consumption of HFCS. In exchange for this limitation, the sugar industry
agreed to supply sugar to the soft drink bottlers at below-market prices,
the corn refiners said.

Charles F. Conner, president of the Corn Refiners Association, said,
"The support given by the Government of Mexico to the restraint
agreement is highly objectionable under any standard of fairness or
equity in international trade. The Government of Mexico is engaged in a
blatant attempt to restrict HFCS access in the Mexican market. The
restraint agreement is a classic boycott by the Mexican sugar and soft
drink industries. Such unreasonable practices are illegal and should not
be condoned."

Conner also said, "We regret that our disputes over sweetener trade
with Mexico have left us with no other option but to pursue a Section
301 petition. The Corn Refiners Association remains hopeful that the
Mexican government and the Mexican sugar industry will rethink their
aggressive campaign against high fructose corn syrup in order to avoid
any short-term and long-term disruptions in Mexico's sugar access to
the United States."

The corn refiners have been battling with Mexico for some time. Earlier
this year, the association asked a North American Free Trade
Agreement (NAFTA) panel to review Mexico's decision to impose final
antidumping duties on high fructose corn syrup. Five other U.S. HFCS
exporters -- Archer Daniels Midland Co., Cargill Inc., Cerestar USA,
Corn Products International, and A.E. Staley Mfg. Co. -- joined in the
request. A decision on that may not be forthcoming for more than a
year.

On Jan. 24, Mexico imposed final antidumping duties on HFCS-55 and
HFCS-42. The new HFCS-55 duties range from $55.37 to $175.50
per ton. The per-ton range for HFCS-42 is $63.75 to $100.60.